Southern States Life Ins. Co. v. Dunckley

• Decision Date: 11 May 1933
• Docket Number: 4 Div. 666.
• Citation: 226 Ala. 588,148 So. 320
• Parties: SOUTHERN STATES LIFE INS. CO. v. DUNCKLEY et al.
• Court: Alabama Supreme Court

148 So. 320

226 Ala. 588

SOUTHERN STATES LIFE INS. CO. v. DUNCKLEY et al.

4 Div. 666.

Supreme Court of Alabama

May 11, 1933

Appeal from Circuit Court, Houston County; H. A. Pearce, Judge.

Bill to cancel a policy of life insurance by the Southern States Life Insurance Company against W. W. Dunckley and Mattie Lou Dunckley. From a decree dismissing the bill, complainant appeals.

Affirmed.

Farmer Merrill & Farmer, of Dothan, for appellant.

O. S Lewis, of Dothan, for appellees.

KNIGHT Justice.

Bill by Southern States Life Insurance Company, appellant here, to cancel a certain policy of insurance, issued by it on the life of W. W. Dunckley, with Mattie Lou Dunckley, wife of the insured, as the beneficiary. The policy contained double indemnity and disability clauses, and was issued as of date January 24, 1928. The stated theory of the bill is: (a) The insured made false statements as to his health in his application for the insurance, and in answer to questions by the medical examiner; and (b) that there was a breach of warranty in the "good health clause" as contained in the application and the policy issued thereon. The application was made under date of January 3, 1928, and the answers to the medical examiner under date of January 10 1928.

It was stipulated in the application that: "The taking effect of said policy is subject to the existence of my continued good health, which by receiving said policy I represent to have been unchanged." And the policy contains this provision: "This policy shall not take effect until it has been actually delivered to and accepted by the insured, nor until the first premium shall have been actually paid while the insured is alive and in good health."

The substance of the respondent's defense, in addition to a denial that he made any false or untrue statements in his application for the insurance, or in his answers to the medical examiner, is that the complainant is estopped, by its conduct and dealing with the insured, with full knowledge, or notice of the condition of insured's health, from insisting upon the invalidity of the policy. The contention in this regard of the respondents is that the complainant, after being advised of the true condition of the insured's health, did demand and accept two annual premiums on said policy, one in January, 1929, and the other in January, 1930.

The cause was heard on the pleadings and proof, and in an elaborate and painstaking opinion, the chancellor held that the charge that the insured had made false statements in his application for the insurance, and in his answers to the medical examiner was not proven, and he further held that, under the evidence, the appellant had waived the breach by the insured of the health clause of the policy and had estopped itself from claiming a forfeiture of the contract, and therefore that it was not entitled to the relief prayed for. A decree was accordingly entered denying relief and dismissing the bill of complaint.

This appeal presents for our review the correctness of the court's decree.

We have carefully read and considered all the evidence in the case, and are at the conclusion that the complainant has not sustained the burden of proof as to its charge that the insured made false statements in his application for the insurance, or in his answers to the medical examiner, and this feature of the case can be dismissed from further consideration.

The evidence leaves no room to doubt that at the time the policy was delivered to the insured's wife, the insured was a critically ill man, and was then a patient in the Moody Hospital at Dothan, Ala., and he remained in that hospital from February 22, 1928, to about March the 18th, same year. On leaving the Moody Hospital the insured was transferred to the United States Government Hospital at Fort McPherson, Atlanta, Ga., for observation and treatment. From the last-named hospital, he was removed to Walter Reed Hospital, Washington, D. C. The said W. W. Dunckley has never recovered from the illness, which, the evidence leaves no room to doubt, commenced on February 21, 1928.

While the evidence establishes the above facts to a point of absolute certainty, yet it also shows that the company's agent, who solicited and delivered the policy and collected the initial premium, knew of the insured's illness at or about the time the policy was delivered; that J. F. Collins, a general agent of the company at Hartford, Ala., was informed, by letter from Cox, the local agent, of the illness of Mr. Dunckley as early as April 18, 1928, and also of the fact that the illness dated back to February 21, 1928; that the company was advised, under date of April 18, 1928, of Mr. Dunckley's illness, and in the letter of advice to that effect, a letter from Dunckley to the agent Cox was inclosed, in which the said Dunckley stated that he was admitted to the Moody Hospital at Dothan on February 21, 1928; that the company in December, 1928, was furnished a record of the illness of the insured at the Moody Hospital. The evidence leaves no room for doubt that long before the company called upon the insured for payment of the second annual premium, and payment made in response to the demand, the company was fully aware of all the facts relating to the illness of the insured, its extent, seriousness, and the date when it began. The evidence is further convincing to the point that, when the company demanded and accepted payment of the third annual premium, it was fully cognizant of the serious illness of the insured at the time the policy was delivered to him.

The clause in the contract of insurance, viz., "this policy shall not take effect until it has been actually delivered to and accepted by the insured, nor until the first premium shall have been actually paid while the insured is alive and in good health," has been given by this court the meaning and effect of a warranty, within the terms of section 8364 of the Code. Reliance Life Ins. Co. v. Sneed, 217 Ala. 669, 117 So. 307; Cotton States Life Ins. Co. v. Crozier, 216 Ala. 537, 113 So. 615; So. Life & Health Ins. Co. v. Morgan, 216 Ala. 529, 113 So. 540; Mut. Life Ins. Co. v. Mandelbaum, 207 Ala. 234, 92 So. 440, 29 A. L. R. 649; Independent Life Ins. Co. v. Seale, 219 Ala. 197, 121 So. 714; J. W. Lindsey v. Stewart Bros., 219 Ala. 197, 121 So. 700.

The above-quoted clause of the contract was inserted for the benefit of the insurer, and being for its benefit, it could waive the same, or, by its dealings with the insured, could put itself in such a position as to be estopped from insisting upon the breach. American Nat. Ins. Co. v. Few, 224 Ala. 576, 141 So. 234; United States Life Ins. Co. v. Lesser, 126 Ala. 568, 28 So. 646; National Life Ins. Co. v. Reedy, 217 Ala. 114, 115 So. 8; Reliance Life Ins. Co. v. Sneed, 217 Ala. 669, 117 So. 307; Manhattan Life Ins. Co. v. Parker, 204 Ala. 313, 85 So. 298.

"The weight of authority supports the proposition that an insurance...